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FRACKING AND THE AMERICAN COMEBACK

by J.R. Dunn



DEMOCRACY AND TECHNOLOGY

Technology and democracy go hand in hand. Technology thrives in the democratic context far more than in other political systems, while at the same time protecting democratic societies from their own errors, particularly as regards foreign policy.

For a number of reasons, all of them inherent—and it seems, unavoidable—democracies tend to fumble foreign policy, particularly the political-military aspect. Democracies continually throw away positions of advantage, abandon useful alliances, assist their own enemies, and forego military readiness. The end result of this syndrome, without notable exception, is that democratic states are commonly taken by surprise by their adversaries, suffer horrible military setbacks, and require unnecessary time and effort to recover, at terrible cost in national treasure and human lives.

This process is not debatable. It has occurred four times in the past century to the United States, and is recurring even now. Following WW I, the U.S. abandoned its European alliances and dumped its laboriously established military in pursuit of an illusory “isolationism.” One major result was that a revanchist Germany burst out of its restraints under the guidance of a murderous barbarian/modernist ideology to ravage Europe from the Atlantic to the Urals. After WW II, in the face of a belligerent Soviet Union, the U.S. repeated the process, reversing it only at the last possible minute after jolts provided by the Berlin blockade (1948) and the invasion of South Korea (1950).

The Cold War resulted in two such episodes, the first taking place in the 1970s as a consequence of the Vietnam War. An interlude of defeatism in the war’s aftermath effectively disabled the U.S. both diplomatically and militarily, enabling communist forces to run riot globally during the latter part of the decade. This trend was reversed by Ronald Reagan, and led to the collapse of Soviet hegemony in 1989. But then the U.S. reverted to type, taking a decade-long “holiday from history” during the ‘90s even as militant Jihadis murdered Americans and attacked U.S. installations and interests worldwide. The U.S. collectively shrugged, convinced that an ephemeral and unsupported “new world order” would take care of everything. We know how that worked out.

A pretty sorry record, on the face of it. But as one master of foreign policy once put it, “God looks after drunks, children, and the United States of America.” It seems that one of the tools the Almighty uses for this task is technology. The beneficial aspects of democracy—individual empowerment, a consistent legal system, and free markets—enable technological advancement that allows democracies to dodge the expected results of their errors—absorption, enslavement, or extinction. (Whether the beneficial aspects of democracy are the flip side of its drawbacks, with one unable to exist without the other, is a question worth asking, but one we won’t get to in this space.)


AMERICAN TECHNOLOGICAL DOMINANCE

During WW II the U.S. went from the near-zero of the Great Depression to a technological dominance over its enemies previously not witnessed in history. The list of technical innovations created during the war is staggering and ended with two atomic bombs that curtailed hostilities in short order and with only a fraction of the casualties expected during the endgame against Japan. (Anyone doubting this is invited to glance at the casualty list of Okinawa, the war’s final battle.)

In 1948, Stalin’s attempted checkmate at Berlin, which would have been unanswerable only a decade previously, was met by an airlift of thousands of aircraft which fed the besieged city for nearly a year until the Soviets at last admitted defeat. Similar technological knight’s moves were carried out repeatedly over the ensuing four decades until a corrupt and exhausted USSR at last collapsed.

Following 9/11, the U.S. deployed its technologically unmatchable military along with intelligence assets such as advanced data mining and armed drones to both roll up shadowy Jihadi networks and destroy several of their national sponsors.

So commonplace have American technological end runs become that they have generated something on the order of institutional terror on the part of America’s enemies. When in 1983 Reagan proposed his Strategic Defense Initiative (SDI), domestic critics dismissed it as “Star Wars” (forgetting that it was the title of a really popular movie). The Soviets, on the other hand, were driven to near-hysteria. They had seen Uncle Sam pull too many technological rabbits out of his hat to doubt this one. Abandoning their efforts to outflank the U.S., they turned to desperate diplomatic measures, far too late to save their empire.

The cycle continues today. Weary of a seemingly endless war against Jihadi terrorists, the U.S. is drawing back much as it did in the early 1920s. American military efforts are slowly being curtailed, in many cases without tangible results. Military procurement is in a state of free-fall, with major programs being constricted or shut down completely. (Little of this can be blamed on the so-called “sequester,” which is in fact merely a rollback of scheduled increases in spending, and not a decrease at all.) Emblematic is the July 2009 cancellation of the F-22 Raptor, a fighter aircraft beyond anything even envisioned by foreign air forces. Further programs will disappear in the near future. Talk is being heard of unilaterally abandoning nuclear weapons, even as rogue states such as a North Korea and Iran achieve nuclear breakout.

This pullback is occurring during the watch of the strangest foreign policy/national security team on record, one that (particularly with the recent appointments of Samantha Power as UN ambassador and Susan Rice as chair of the National Security Council) is motivated by a bizarre mix of idealism and cynicism, with the idealism directed at our enemies and the cynicism at our allies, in particular our oldest democratic friends, the UK and Israel.

Since troubles come in battalions, it is no surprise to note that the U.S. military as a whole is going through a massive internal metamorphosis on behalf of various ethnic and social/sexual minorities. Whatever side one takes in this debate, it must be admitted that the process is lacking due attention to the traditional military virtues. Among other things, we are in short order going to learn whether transsexuals can command large military units. (The only historical example we have for this is Narses, and that’s not quite the same thing.) And that may not be the worst of it.


THE CYCLE TURNS

All things being equal, and in light of the historical record, the U.S. is headed for serious military setbacks in the near future. From what direction these will come is anyone’s guess—as ever, we live in a world overstocked with predators. Whether we will be beaten down to the level of the first half of 1942—the worst period for the country since the Valley Forge winter of 1778, with catastrophic defeats at Pearl Harbor, the Philippines, Guam, Wake Island, the Java Sea, and the Atlantic coast—also remains to be seen.

But we can hope that the cycle will remain true and that the U.S. will recover and prevail with the aid of its technical prowess. When good sense, experience, and rationality all fail, the U.S. falls back on its ingenuity.

While the nature of these breakthroughs remains a matter of speculation, one of them may already be in place—the process of hydraulic fracturing, popularly known as fracking.

Technical advantages are not limited only to combat. They may in fact lack any direct connection to the battlefield. One of the major factors in Allied victory in WW II was American manufacturing. U.S. industry came out of the Great Depression (another crash had occurred only a few years before, in 1937) to break all known production records in the space of a few short years. American industrial production became a key factor even before the U.S. was directly involved in the war itself, in large part through Franklin D. Roosevelt’s Lend-Lease policy. An effectively gratis provision of goods, equipment, and weapons kept Great Britain afloat for a year while facing the Third Reich essentially alone. After Pearl Harbor, American industry was loosely organized under the guidance of Robert Patterson, FDR’s chosen production chief (today we’d call him a “czar”). Lend-Lease was extended to the USSR in amounts that dwarfed the aid sent to England. Hundreds of thousands of trucks, countless tons of supplies and food, no less than nine million pairs of boots, and entire production runs of aircraft were sent east. It’s no exaggeration to state that the Soviets would not have survived without this assistance. (For their part the Soviets carefully painted over, filed off, or peeled away any sign that this material had come from the U.S.)

Apart from the UK and the USSR, the United Stated armed, equipped, and clothed large units of French and Polish troops and entire Chinese armies, as well as its own men fighting in a half a dozen theaters around the globe.

Clearly, American productive capacity—an outgrowth of democratic capitalism—was a crucial element in the course of WW II. Some historians have gone so far as to claim it is the sole crucial element, that victory emerged simply from a pack of ignorant backwoodsmen commanded by halfwits and lunatics drowning the Reich and Imperial Japan in floods of weapons, supplies, and ammunition. This is going way too far. But it can’t be denied that industry was of coequal importance with armed force during the conflict. Without American industrial superiority, WW II might have bogged down into one of those multigenerational nightmare conflicts so common to European history. The course of the last global war establishes that in a democratic/technical culture embodies military superiority as a matter of course. (While the Nazis made a number of technological breakthroughs involving weaponry, including the Me-262 jet interceptor, the Arado-234 Blitzbomber, the V-1 cruise missile and V-2 ballistic missile, they were able to get virtually none of them into production soon enough to affect the course of the war.)


TECHNOLOGY AND RESOURCES

Industrial superiority implies control of natural resources. It is with this factor that things began to go wrong in the postwar period. Rather than leverage its position at the end of the war into a global hegemony comparable to that of Rome or the British Empire, the U.S. was hard-pressed to exercise any form of control at all and at times could scarcely get its influence felt. This was in large part due to the collapse of the European colonial system following the war, along with the peculiar distribution of terrestrial natural resources.

It goes without saying that a technological society is reliant on energy. The cheapest, most transportable, and most compact current form of energy are the hydrocarbons, in particular oil and natural gas. The problem, from theWestern point of view, arises with the distribution of these energy resources. While substantial deposits of free-standing oil occurred in Texas and California (along with later discoveries in the North Sea), far larger deposits were found either in the Middle East, the most culturally isolated and regressive area in the world, or a collection of barely operative states such as Mexico, Venezuela, and Nigeria. As for natural gas, it turned out that the largest easily-extracted deposits occur in Siberia, controlled first by the Soviet Union and later by Russia.

This distribution proves that the Almighty has a sense of humor, and a sardonic one. The problems—political, military, economic, and social—created by this uneven distribution of energy resources in the late 20th century are so great and varied that they can only be touched upon. Oil has been the cause of near-infinite corruption in Mexico, Venezuela, and Nigeria, but this is trivia. The vast deposits in the Middle East served to validate, extend, and empower a medieval social and political system whose leaders loathed the West on virtually every possible grounds. Natural gas provided necessary foreign currency to the Soviet Union, enabling it hang on for decades after it should have collapsed under its own weight.

Neither the Arabs nor the Soviets showed an ounce of hesitation over utilizing these windfalls as weapons—usually with the United States and its allies as targets. During the ‘70s and ‘80s, the Soviets attempted to carry out a long-range plan to neutralize an energy-hungry Europe by supplying cheap natural gas and then manipulating the supply to guarantee support of Soviet interests. So fearful was the U.S. of this program that in 1982 it sabotaged the Siberian pipeline in what may well have been the first cyber attack. Russian autocrat Vladimir Putin has revived a more limited version of this plan.

But that too is nothing compared to the Arabs. With their lengthy cultural inheritance combining bazaar haggling as merchants and conspiracy in personal vendettas, the Arab oil states knew exactly how to take advantage of a resource like oil.

Although OPEC (the Organization of Petroleum Exporting Countries), a resource cartel effectively run by Saudi Arabia, was founded in 1960, its first real impact occurred in the aftermath of the Yom Kippur War of October 1973. Angered at Western support for Israel, the Arab states in control of OPEC decided to punish the West by weaponizing oil production. OPEC simultaneously cut production and raised prices, causing an “oil shock” that soon deteriorated into an “energy crisis.” The United States in particular was thrown into panic, with de facto rationing and long lines at gas stations occurring across the country. The situation was complicated by environmentalist claims that the crisis had been triggered by an “oil shortage,” which was pure misrepresentation, and by accusations that “Big Oil” was conspiring to keep prices elevated.

For a number a reasons, including war weariness over Vietnam (the Paris treaty had been signed only months before), and the fact that the Nixon administration was enmeshed in the Watergate scandal, no response was forthcoming. Scarcely as much as a sharp diplomatic note was sent to the oil states, with no further action taken either by the U.S. or Europe.

The oil states got clean away with it—and had seen an impressive increase in income as well. For the rest of the 1970s, the process was repeated, with the OPEC states tightening the oil faucet for any reason or none—anger at Western actions, a need for the kingdom’s budget to be balanced, a favorite dancing boy run off. The process became a brutal gavotte with a distinct resemblance to an abusive domestic relationship. The oil states would punish the West, which would come crawling back full of apologies and pleas, to be “rewarded” with a slight lowering of prices—though never permanent and never to the previous level.

Some sanity returned with the outbreak of the Iran-Iraq War in September 1980, which demonstrated to the Saudis and the Gulf emirates and they needed the West—the U.S. in particular—to provide protection against local prowlers such as Iraq’s Saddam Hussein. Prices continued rising all the same, particularly after both sides embarked on the “Tanker War,” attacking third-party tankers carrying the enemy’s oil across the Persian Gulf and forcing NATO navies to provide escorts.

The situation in the Gulf grew even more fraught when Saddam Hussein seized Kuwait in a naked attempt to exploit its oil resources. A spectacular American-led campaign successfully ejected Iraqi forces from Kuwait, securing the Gulf’s oil supplies.

But the overall situation remained pathological, with the oil states—primarily Middle Eastern and Islamic—continually gouging the West for as much as they could take. There is reason to believe that Gulf state rulers view this as a “dhimmi tax,” the tax required of “kaffirs,” that is, non-Muslims, living under Islamic dominance. Prices increased inexorably, crossing the milestone $100-a-barrel mark (up from $3-5 dollars a barrel in the early 1970s) in January 2008. It’s difficult to view this as anything other than banditry on the grand scale. In recent years, the Gulf states have pocketed over a trillion dollars a year from international oil transactions. This has caused untold economic damage. It is part of the explanation as to why the 1970s were a “lost decade” economically throughout the West, with many of the major economies mired in “stagflation”—a combination of stagnation and inflation. At one point late in the decade, the oil states had amassed so many dollars that it distorted the international money supply, threatening a liquidity crisis on a scale never before seen. The Saudis had to be persuaded to reinvest much of their “petrodollars” in Western economies. The price was even higher in poor nations, raising food, fuel, and fertilizer costs for the earth’s most unfortunate fifth. Many countries still mired in underdeveloped status would have broken out decades ago if it hadn’t been for fuel costs.

Not even the oil states themselves profited from the influx of treasure. While some worthwhile investments were made—the spectacular architecture of Dubai is one example—much of it was wasted. Little money was spent on developing industry, education, scientific research, or infrastructure. The bulk of it went to royal families, who spent it on toys, luxuries, sprees (like the Saudi prince who spent $20 million at Disneyland Paris last May) and the like. The military soaked up much of what remained. What did trickle down to the commoners largely resulted in a dependent class living on what amounted to welfare. Like the Spanish gorging on New World gold and silver in the 16th century, the oil states have discovered that a viable way of life cannot be based on windfalls.

Even more sinister was the money spent by the Saudis to bankroll the spread of Wahhabism, a throwback interpretation of Islam emphasizing many of its worst features, including xenophobia, torture, and degradation of women. Among other programs, the Saudis spent vast amounts building mosques in areas of the world where there was no appreciable Islamic presence. Once limited to the Arabian peninsula, Wahhabism is now the dominant form of Islam. Comparable amounts were spent to support terrorist and anti-Israeli groups (though for various reasons, the Arabs were never successful at preventing Israel from buying oil). The Saudis and the emirates supported the Muslim Brotherhood, the PLO, and Al Fatah. The Iranians supported Hezb’allah and Hamas. Oil money effectively locked the Arabic oil states into permanent hostility against the West, with vicious consequences for both sides. (19 out of 20 of the 9/11 hijackers were Saudis.)

As the third millennium progressed, the oil pathology was viewed by most in much the same way that the USSR had been viewed in the early 1980s—an unpleasant reality that little could be done to improve. But such situations tend to carry the seeds of their own resolution.


FRACKINGA NEW DECK OF CARDS

Fracking was first developed in the late 1940s. For decades, it was considered an esoteric technique too expensive for widespread use. There were plenty of accessible oil pockets available to be drilled—who needed fracking? But as oil prices broke the $100 a barrel milestone late in the last decade, fracking (admit it—you keep thinking of Battlestar Galactica) began looking more attractive.

The problem with shale formations is that the rock is not porous enough to allow the flow of fluids even under enormous pressure. The shale must be fractured into small pieces over a large area to enable fossil fuels to be extracted.

Hydraulic fracturing is accomplished by pumping fluids at extremely high pressure into shale beds. Fracturing fluids consisting of 90 percent water, 9.5 percent sand, and a pinch of various chemicals are mixed in a blender on site before being injected at pressures of over 9,000 pounds per square inch into a shale formation. The water breaks up the shale, the sand holds the fractures open, and added chemicals aid extraction. Guar, an organic gum, assists water in penetrating the shale. Dilute hydrochloric acid then clears away the guar and prevents bacteria growth. Diesel oil helps stimulate flow. The amount of water used in the process is prodigious—up to seven million gallons for a single well. The bulk of the fluid is extracted after the well is finished and is often recycled for further drilling.

Completing a well requires seventy to a hundred days—four to eight weeks of preparation, four to five weeks of rig work such as casing and cementing, and four to five days for the fracking proper. The process is highly industrialized, featuring large amounts of auxiliary equipment and a lot of truck traffic. But once complete, the site is no more intrusive or unsightly than any other drilling operation.

Horizontal drilling, in which a vertical well can be “turned” and drilled sideways, is another technology that has come into its own in the age of shale. Originally a specialty technique utilized only in limited circumstances (e.g., when it was necessary to reach a target located underneath a city or other obstacle), horizontal drilling has become standard in shale operations. Horizontal wells can hit pockets impossible to reach by conventional drilling, increase productivity by lengthening the “pay zone” from a few feet to over a mile, and allow dozens of wells to be drained by a single drill pad, dramatically reducing the surface impact of extraction operations.

Horizontal wells are first drilled vertically to a certain precalculated point, when the drilling pipe is pulled out and a hydraulic motor powered by pressurized drilling mud is attached to the drill bit. The well can then be oriented in any direction. This is of particular value as regards shale formations, since the well can be drilled to precisely intersect the fractured area. Horizontal drilling is up to three times as expensive as conventional drilling, but the cost is more than covered by increased production.

Fracking has been used in drilling over a million wells in this country. It is estimated that 80 percent of wells drilled in the next decade will utilize the process. Most of these wells involve natural gas. Shale gas has exploded from 1percent of natural gas production in 2000 to nearly 40 percent today. In the past five years, the U.S. has gone from importing close to 90 percent of its natural gas to taking steps to become an exporting nation.

Formations opened up by fracking include the Bakken Shale in Montana and South Dakota, which at 4.3 billion barrels comprises the largest oil find in U.S. history. (One peculiarity of shale formations is that they tend to produce oil or gas but not both.) The Barnett Shale in north-central Texas holds over 43.4 trillion cubic feet of natural gas. The Eagle Ford Shale in southwest Texas, discovered in 2008, is unusual in producing both oil (3.35 billion barrels) and gas (21 trillion cubic feet). The Haynesville Shale, sprawling across east Texas, Louisiana, and southern Arkansas, may contain up to 251 trillion cubic feet of gas.

Other shale beds include Michigan’s Antrim Shale—unique in that it has already been fractured, possibly by ice age glacial action; it now supports over 9,000 wells—and the Fayetteville Shale of Arkansas. But it’s the Marcellus Shale that dominates American fossil fuel production. One of the largest shale regions in the U.S., it stretches across New York, Pennsylvania, and West Virginia, with outcroppings in Ohio and Maryland. It represents the second largest natural gas find in the world, containing an estimated 410 to 1,300 trillion cubic feet of gas, along with billions of barrels of ethane, a basic plastics industry feedstock. The natural gas alone accounts for up to two centuries of consumption at current rates.


Over the past year new shale beds have been discovered in California (though these are unlikely to be exploited any time soon), with further possibilities in Wyoming, Utah, Colorado, and New Mexico. It is conceivable that the majority of shale beds contain recoverable hydrocarbons. But even a fraction will push back the depletion horizon by a matter of centuries. All talk of “peak oil,” and “energy crises” have been rendered quaint, of a nature similar to bell-bottoms and paisley ties.

It has been so long since the U.S. has experienced a resource boom that we have largely lost sight of the potential benefits. Plans for increased oil drilling are commonly dismissed with the assertion that such a program would do nothing to improve current economic conditions since it would require years for new energy supplies to reach the market. But markets operate through anticipation—any sign of changing conditions generates an immediate response, either positive or negative. Changes brought about by the shale revolution have already become apparent.

This is clearly the case in Pennsylvania. Exploitation of the Marcellus Shale in the state’s north-central region protected it from the more brutal ravages of the Great Recession. In 2010, economic activity due to shale gas operations amounted to $11.2 billion, with state government collecting $1.1 billion in taxes. Drilling created 140,000 jobs, not to overlook those in related industries such as specialty steel manufacturers in the Pittsburgh area—drilling operations use a lot of pipe. (South Dakota, home of the Bakken Shale, has benefited as much or more than Pennsylvania.)

Objections by environmentalists include fears that fracking could pollute groundwater or trigger earthquakes. Poor operational management in Pennsylvania resulted in spills that temporarily fouled several creeks, while drilling in the Bristol area of the English Midlands caused several small but detectable earthquakes. The answers to these objections appear straightforward: don’t drill near aquifers, don’t drill near faults. (It’s reasonable to suspect that the actual problem that greens have with fracking is that it clearly forecloses on various renewable programs such as solar and wind power—hydrocarbons gained through fracking are substantially cheaper than such methods.)    

Largely due to environmental objections, several northeastern states have failed to follow Pennsylvania’s lead. New York, under Gov. Andrew Cuomo, has effectively banned the process, even though the state was one of those hit hardest by the recession. New Jersey has done the same, even though no detectable shale deposits exist within the state. Delaware governor Jack Markell went so far as to interfere with Pennsylvania’s fracking industry through the Delaware Water Gap Commission, which provided him with veto power over fracking in the Delaware watershed. Ohio, which shares several shale beds with Western Pennsylvania, played a stop and start game for several years before finally settling on a workable set of regulations allowing industry exploitation.

The benefits of fracking unquestionably outweigh any drawbacks. A stable energy market cannot help but boost the economy over the long term. Industry observers are predicting effective American energy independence by 2020. A national energy economy in which the bulk of industrial processes and home heating have switched to natural gas, along with domestic oil supplies supplemented by the Alberta tar sands, would be insulated from market shocks caused by speculation, Mideast wars, and the whims of OPEC. In the past, electrical utilities have hesitated to switch from coal to natural gas for fear of instability in price and supply. With a secure source, these utilities should be less wary, which will lead to cuts in electricity costs. (They may not have any choice, considering that the Obama administration moved to effectively shut down the coal industry in June 2013.) Natural gas prices have dropped by half in the past five years even though demand has risen by over 40 percent. We can look forward to further cost decreases as more shale gas reaches the market.

Over the longer term, the dream of natural-gas fueled automobiles could be revived, particularly in the light of the market failure of recently introduced electric models such as the Tesla and the Fisker. Since over half of American homes are heated by natural gas, a potential fueling infrastructure already exists. It would require a compressor and a safe and dependable fueling system to convert home gas heating systems into private auto fueling stations.

A natural gas economy would be environmentally cleaner. Well-informed environmentalists welcome the prospect of natural gas replacing coal. Burning gas releases only half the amount of CO2 into the atmosphere, an important consideration to those who take anthropogenic global warming seriously. Although methane leakage during drilling reduces those benefits, this is an engineering detail. Improvements in design and execution can seal wells tight as a drum, cutting methane leaks to next to nothing.

In a few years, the rest of the country will begin to enjoy the benefits already visible in Pennsylvania and North Dakota. Nor is the promise of fracking confined to the United States alone. The UK has been neck and neck with the U.S. in exploiting the new technology with shale beds in the Midlands and Scotland. China, at the end of a long and vulnerable oil lifeline to the Middle East, is moving to open its own shale beds. Even Israel, long the Mideast orphan as regards hydrocarbons, has discovered large shale deposits of keroten, a pre-petroleum resource that requires extra refining. The old joke about the Lord giving Moses the only spot in the area without oil is no longer operative. It is within the realm of possibility that every large nation on earth will soon be able to tap its own energy supplies. (Eager to maintain its reputation for absolute mulish contrariness, France has banned the fracking process completely.)


FRACKING AND GRAND STRATEGY

The impact of fracking has been largely overlooked by political commentators, generally not a group with much in the way of technical educations. One example is Mark Steyn, the acerbic Canadian-American analyst, who has been preaching the imminent collapse of the United States for several years. Asked about fracking, he replied he hadn’t heard about it and wasn’t interested in it. Much the same can be said of most other pundits. Left-wing thinkers have been happy to follow the environmentalist lead, attacking the technology as another threat to Mother Gaia. The right simply stares in open-mouthed puzzlement before returning to earnest discussions as to what James Madison would make of Lady Gaga. Only a handful see the golden opportunity that fracking represents.

Fracking’s greatest impact will involve international relations. As we have seen, the current status quo is based largely on control of energy resources. It is overdue to be shaken from top to bottom. The end of U.S. dependence on foreign energy sources—predicted for 2020—will create a booming economy, with more jobs and a far healthier balance of payments than the country has seen for decades, translating into greater freedom of action in the international plane.

But even more important is the effect on the oil and gas-producing states. Fracking will put an end to the oil weapon. Though not quite visible in recent years, with the U.S. acting as the direct protector of the Gulf States, the potential for dropping the oil bomb still exists. A change in regime or a fit of pique could once again lead to Arab pressure on the markets with the full intention of modifying Western behavior. At this point it would still have a small effect on the U.S. After 2020, any effects would be minimal. The emirs and kings could press the button as much as they liked and the oil bomb will simply not go off. (The oil kingdoms appear to be well aware of this. The Matt Damon film Promised Land, a ham-handed attempt to undercut fracking, was bankrolled by the government of Abu Dhabi.)

Once the vast flood of oil profits are cut down, things will get tight in the kingdoms rather quickly. Oil comprises close to 100 percent of the income of the Gulf States—a few the emirates also act as financial centers—and the royal families have shown little aptitude for money management. Two elements will require full funding—royal incomes and social welfare subsidies to the commoners. Any attempt to cut either will result in internecine slaughter among the nobility or mass popular uprisings. All else—terrorist subsidies, military purchases, payoffs to various anti-Israeli political factions, and grandiose Wahhabi expansion schemes around the Indian Ocean littoral—will have to go by the board. The processes set in motion by these actions are difficult to anticipate. The end result could vary from a general takeover by radicals of the Muslim Brotherhood/Al Qaeda type, a breakout of the currently threatening Sunni-Shiite civil war, or should the kingdoms luck out and avoid open chaos, a more conciliatory Arab leadership (who will still require Western assistance against radicals and other threats), a dramatic easing of hostility toward Israel, and a generally far more cooperative attitude overall. The one thing we can be certain of is that nothing will be the same.

Unfortunately, fracking has not appeared soon enough to deprive the Iranians of a nuclear weapon—but it will deprive them of everything else. David Goldman (“Spengler”) has long argued that Iran stands of the brink of a demographic catastrophe, with its replacement rate of 1.6 the lowest in the Middle East. Within a generation, the elderly will nearly outnumber the rest of the population. Any move the mullahs intend has to be made soon. Cutting off oil money would deprive the ruling “Council of Experts” and their puppet president (it’s amazing how few members of the Western media can’t get this simple fact of Persian civics straight) of funds at just the wrong time, leaving them a choice between pensions for a growing elderly cohort and funding for the military. The best use of a nuclear armory is as a shield for conventional activity—a country with nukes can simply get away with stuff that a nonnuclear power cannot. This is exactly how the Soviets operated for decades during the Cold War, interfering with smaller countries, funding revolts and civil wars, and blatantly murdering or attacking opponents (up to and including the Pope) while rattling their nukes at anybody who gave them a cold eye. North Korea has proven to be an apt student of this school of diplomacy, and Iran is about to graduate. But an Iran deprived of oil money will no longer be able to fund its massive military and intelligence establishments, along with the allowances sent to Hamas and Hezb’allah (Iranian relations with Hamas are dismal as it is). The mullahs will be left with very few pieces on the board and very few moves to make. In short order, hunger and discontent on the domestic front will leave them with their hands full.

The effect on Russia would be similar. Control of Siberian natural gas has paid serious dividends to the Putin dictatorship. European reaction to the regime’s campaigns against everyone from female punk rockers to businessmen, the assassinations of reporters and activists, and military atrocities in Chechnya and Georgia have been muted, to say the least. Natural gas and oil account for 58 percent of Russia’s foreign trade. A fuel-independent Europe might not bring down the squalid Putin regime, but would cut its freedom of action considerably.

Other benefits on the international front may also accrue. A lot of the pressure forcing events in the South China Sea, where China is claiming vast areas as “blue territory,” that is, its historical property, stems from potential undersea oil and gas deposits. If the Chinese are encouraged to exploit their shale resources, this will certainly ease tensions and prevent possible confrontations with Vietnam, the Philippines, Indonesia, Japan, and Taiwan.

So far, prospects look entirely beneficial. Can that possibly be true of a technical process such as fracking? Skepticism is certainly justified. But at this point, drawbacks are not apparent, and fracking certainly offers an improvement over the current situation, with an insolent Russia, a messianic Iran, and spoiled and bloated Arab states slugging it out at the edge of the abyss.

The major goal at this point should be to dry up the excess funds being used to carry out vicious policies such as terrorism and military adventures. At this point, it is the three chief democracies that hold the lead in fracking technology—the United States, the UK, and Israel. It should be relatively simple to formulate a strategy to take the best advantage of the technology as, for all practical purposes, the fracking weapon. Fortunately, third parties such as France, with a tendency to interfere and undercut the efforts of Anglophones and Jews, have pretty much dealt themselves out of this hand.

We should continue pegging the price of hydrocarbons lower, on a gradual basis to avoid panics and dislocation. While it’s unlikely that we’ll ever see $5 a barrel oil ever again (although natural gas exploration is undergoing an industry-wide hiatus due to the fact that too great a supply exists, bringing prices almost down to the loss-leader point), cutting hydrocarbon prices to a substantial fraction of where they now stand should be a straightforward process. All things being equal, prices on most forms of energy should also begin to drop.

With the funding spigot to the Persian Gulf shut off, terror financing will dry up. This will have disadvantages—attempted hijackings, robberies, and kidnappings by terrorist groups are likely to increase as a result. But at the same time this will force these groups out into the open where they can be easily picked off.

Prospects for Iran are more shadowy. By the time the effects of fracking hit, it is likely that the mullahs will possess several primitive nuclear weapons and will use them to extort aid and concessions much as North Korea does today. But the challenges facing Iran are far more than a throwback theocracy can handle. Eventually, Iranians can look forward to a successful overthrow.

Russia is equally problematic. Putin is essentially a gangster and can simply shift his efforts. But fracking can heavily reduce his income and influence, which would be a beneficial outcome in and of itself.

A bold policy utilizing fracking resources can substantially undercut two of the four most serious threats facing the West—radical Middle Eastern terror groups and a resurgent Russia. It can seriously disrupt Iran’s current schemes, and can depressurize mounting tensions with China. The rogue states that have depended on control of hydrocarbons to fund malicious national policies can be isolated and controlled, without heavy investments in military hardware or risky confrontations.


A NEW AMERICAN HEGEMONY?

It’s important to keep in mind that these processes are already taking place, set in motion by the simple existence of fracking. For one example, fracking appears to have added some element of stability to energy markets over the past year and a half. Energy prices that gyrated wildly for a decade have settled down. We need to contemplate giving the process more direction to assure beneficial results.

This does not mean replacing OPEC with OFEC. Shale is a nearly universal component of the earth’s crust, and a large amount if not most shale beds contain recoverable hydrocarbons. Within short order, every nation that can afford the technology (except France) will be able to produce its own energy supplies. It should be a priority for the U.S. to assure that fracking technology is as widely distributed as possible, particularly to developing and third-world states. Universal access to energy resources would dramatically lower the threat of resource conflicts and ensure a real basis for global economic stability. The small states cheated for decades by the oil kingdoms will at last have their chance.

This is as close to an energy utopia as can easily be imagined, and the exact opposite of the current situation. Concentration of energy resources in the hands of a few corrupt and ideologically unbalanced countries has resulted in untold evil over the past forty years, not only in the obvious sense of airliners and bombs destroying lives throughout the world, but in the nearly invisible damage of families impoverished, infants starved to death, and societies allowed to stagnate. Much of this can be overcome through intelligent strategic use of the fracking weapon.

So it’s painful to admit that the current administration will very likely not take advantage of the technology. The West as a whole appears to regard its liberation from oil entanglement much the same as the Bastille prisoner who sat staring at his open cell door, unable to grasp what it meant. Despite soaring rhetoric, the Obama administration has proven to be almost pathetically dull-witted and unimaginative, content to push “reforms” that were current in the 1960s or even the 1930s rather than looking ahead into potential of the new millennium. In the international arena, administration figures were badly burned by their last large-scale initiative—encouraging the internal “liberation” of the North African littoral states in the “Arab Spring.” The effort has resulted in near-anarchy along with the empowerment of extremely unsavory radical figures, at last culminating in the deaths of innocent American under appalling circumstances in Benghazi. The administration is likely to limit its foreign activity to badgering Israel to make concessions that no sane government would contemplate.

Barack Obama wants so transparently to become a world-historical figure on the level of a Roosevelt or Lincoln, even as he watches his policies unravel before he so much as leaves office. The pity of it is that the opportunity is sitting right before him in the form of the fracking revolution. But he appears blind to it. Instead he encourages his EPA to delay the process as much as possible.

Eventually, some president—or British prime minister, or other capable and visionary leader—will make that move. Then we may well see a breakup of the logjam left by the 20th century, the destruction of the power of the bandit states, and a fulfillment of the promise made by democracy and capitalism to the peoples of the world.



Copyright © 2013 by J.R. Dunn